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FDIC Updates Community Banking Study for 2012

Posted on 1/2/2014

The FDIC last week updated its Community Banking Study, which examined community bank performance from 1984 through 2011, with data from 2012. The new data show that "2012 represented the best year for community banks since the onset of the financial crisis in 2007," the FDIC said.

Using the original study's definition of a community bank, the FDIC observed a continued "positive outlook" for the sector. Specifically, it noted that bank failures and problem loans continued to decline, the consolidation rate slowed slightly, assets grew and loan loss provisions returned to pre-crisis levels. Net income reached its second-highest annual figure ever, and pretax return on assets exceeded 1 percent for the first time since 2007.

With higher earnings, the agency said, community banks generated more capital through retained earnings. The FDIC did note, however, that no new banks were chartered in 2012 and that the voluntary closure rate at community banks rose to 2.8 percent.

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